GHG GreenTree Hospitality Group Ltd

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

September 2023

 

Commission File Number: 001-38425

 

GreenTree Hospitality Group Ltd.

(Registrant’s name)

 

1228 Zhongshan North Road, Putuo District

Shanghai 200065

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F  x            Form 40-F  ¨

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	GREEN TREE HOSPITALITY GROUP LTD .
	By:	/s/ Alex S. Xu
	Name:	Alex S. Xu
	Title:	Chairman and Chief Executive Officer

 

Date: September 20, 2023

 

 

EXHIBIT INDEX

 

Exhibit No.	Description
99.1	GreenTree Hospitality Group Ltd. Reports First Half 2023 Financial Results

 

 

Exhibit 99.1

 

GreenTree Hospitality Group Ltd. Reports First Half 2023 Financial Results

 

·

Total revenues increased by 12.1% year over year to RMB794.2 million (US$109.5 million)[1].

 

·

Income from operations was RMB150.9 million (US$20.8 million)[1], compared to RMB-474.3 million for the first half of 2022.

 

·

Net income was RMB177.3 million (US$24.5 million)[1], compared to RMB-384.5 million for the first half of 2022.

 

·

Adjusted EBITDA (non-GAAP)[2] increased by 137.8% year over year to RMB226.9 million (US$31.3 million)[1].

 

·

Core net income (non-GAAP)[3] increased by 65.2% year over year to RMB136.1 million (US$18.8 million)[1].

 

SHANGHAI, September 18, 2023 /PRNewswire/ -- GreenTree Hospitality Group Ltd. (NYSE: GHG) ("GreenTree", the "Company", "we", "us" and "our"), a leading hospitality and restaurant management group in China, today announced its unaudited financial results for the first half of 2023. As Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China, were all under the control of our founder, Alex S. Xu, until their acquisition by the Company, the Company accounted for the common-control acquisitions by using the pooling of interest method. The consolidated balance sheets and consolidated statements of comprehensive income/(loss) include the results of each of the combining entities or businesses from the earliest date presented or since the date when the combining entities or businesses first came under common control. In this report, the comparative financial data have been restated to reflect the business combinations under common control.

 

First Half 2023 Operational Highlights

 

Hotels

 

	·	A total of 4,108 hotels with 303,387 hotel rooms were in operation as of June 30, 2023.

·

The Company opened 183 hotels during the six months ended June 30, 2023, and had a pipeline of 969 hotels contracted for or under development as of June 30, 2023.

 

1 The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB 7.2513 on June 30, 2023 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/20220103/.

2 Adjusted EBITDA (non-GAAP) is calculated as net income plus other operating expenses, income tax expense, share of loss in equity investees, net of tax, interest expense, depreciation and amortization, losses from investment in equity securities and the provision for bad debts, but excludes other operating income, interest income and other, net, gains from investment in equity securities, share of gains in equity investees (net of tax), and other income, net. The calculation of Adjusted EBITDA (non-GAAP) included in this report has been aligned according to the abovementioned definition.

3 Core net income is calculated as net income plus share-based compensation, losses from investments in equity securities (net of 25% tax), one-time fees and expense and asset impairment/accrued bad debts but excludes government subsidies (net of 25% tax), gains from investment in equity securities (net of 25% tax), and other income (net of 25% tax).

 

 

	·	The average daily room rate was RMB167 in the first quarter of 2023, an increase of 9.1% from RMB153 in the first quarter of 2022, and RMB181 in the second quarter of 2023, a 23.1% year-over-year increase.

	·	The occupancy rate was 71.7% in the first quarter of 2023, up from 60.0% in the first quarter of 2022, and 77.8% in the second quarter of 2023, compared to 62.2% in the second quarter of 2022.

·

Revenue per available room, or RevPAR, was RMB120 in the first quarter of 2023, a 30.4% year-over-year increase, and RMB141 in the second quarter of 2023, a 54.0% year-over-year increase.

 

Restaurants

 

	·	A total of 218 restaurants were in operation as of June 30, 2023.

·

The AC (average check) was RMB55 in the first quarter of 2023, a 19.2% year-over-year increase, and RMB53 in the second quarter of 2023, a 2.2% year-over-year increase.

 

	·	The ADT (average daily tickets) was 110 in the first quarter of 2023, down from 130 in the first quarter of 2022, and 120 in the second quarter of 2023, compared to 78 in the second quarter of 2022.

·

The ADS (average daily sales per store) was RMB 6,080 in the first quarter of 2023, an increase of 0.9% from RMB 6,027 in the first quarter of 2022, and RMB 6,371 in the second quarter of 2023, a 57.3% year-over-year increase.

 

"For our hotel business, the first quarter of 2023 marked a new beginning thanks to the recovery in the hospitality industry and the entire economy in China. RevPAR recovered to 94.3% of its first quarter of 2019 level. RevPAR during the national Labor Day holiday in early May reached more than 120% of its level in the same period in 2019, capitalizing on the popularity of travel during the national holiday period. And due to an increase in the number of people traveling during the summer vacation, RevPAR in July and August was nearly stable at 110% of its level in the same period in 2019.

 

As previously disclosed, the Company completed the acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China from our controlling shareholder. Our strategy and execution in our restaurant business focus on further expansion in the proportion of franchised-and-managed restaurants and greater penetration to street stores. To ensure the profitability of our restaurant business, we closed unprofitable stores. In the first half of 2023, the ADS of restaurant business recovered to 122.9% of its first half of 2022 level.

 

“We are grateful for the hard work of our team, franchisees, and partners, and the support of our customers that made it possible to recover quickly starting from the first quarter of 2023 as China began returning to normal life," said Mr. Alex S. Xu, Chairman and Chief Executive Officer of GreenTree.

 

 

First Half 2023 Financial Results

 

		Six months Ended
		June 30, 2022				June 30, 2022				June 30, 2022				June 30, 2022
		RMB				RMB				RMB				RMB
		Hotel				Restaurant				Elimination				Total
Revenues
Leased-and-operated revenues			171,272,365				171,008,920				(229,756	)			342,051,529
Franchised-and-managed revenues			275,539,547				18,229,310								293,768,857
Wholesales and others			10,564,787				62,284,229								72,849,016
Total revenues			457,376,699				251,522,459				(229,756	)			708,669,402

 

		Six months Ended
		June 30, 2023				June 30, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		RMB				RMB				RMB				RMB				US$
		Hotel				Restaurant				Elimination				Total				Total
Revenues
Leased-and-operated revenues			213,563,927				168,340,074				(1,125,179	)			380,778,822				52,511,801
Franchised-and-managed revenues			347,417,000				17,355,892								364,772,892				50,304,482
Wholesales and others			2,225,580				46,432,697								48,658,277				6,710,283
Total revenues			563,206,507				232,128,663				(1,125,179	)			794,209,991				109,526,566

 

 

Total revenues for the first half of 2023 were RMB794.2 million (US$109.5 million)^[1], a 12.1% year-over-year increase.

 

Hotel revenues were RMB563.2 million (US$77.7 million), a 23.1% year-over-year increase. The increase was mainly attributable to the recovery in RevPAR and the increase in the number of hotels.

 

Restaurant revenues were RMB232.1 million (US$32.0 million), a 7.7% year-over-year decrease. The decrease was mainly due to the closure of 64 stores, and partially offset by an increase in ADS.

 

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB380.8 million (US$52.5 million)^[1], a 11.3% year-over-year increase.

 

Total revenues from L&O hotels for the first half of 2023 were RMB213.6 million (US$29.5 million)^[1], a 24.7% year-over-year increase. The increase was primarily attributable to a 47.8% year-over-year increase in L&O hotels’ first half RevPAR and more newly opened L&O hotels in the first half of 2023 as compared to the first half of 2022.

 

Total revenues from L&O restaurants for the first half of 2023 were RMB168.3 million (US$23.2 million)^[1], a 1.6% year-over-year decrease. The decrease was mainly due to the closure of 47 L&O stores, and partially offset by an increase in ADS.

 

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB364.8 million (US$ 50.3 million)^[1], a 24.2% year-over-year increase.

 

Total revenues from F&M hotels were RMB347.4 million (US$47.9 million)^[1], a 26.1% year-over-year increase. Initial franchise fees increased 9.3% year over year, mainly because of the increase in the gross opening number of F&M hotels. Recurring franchisee management fees and others increased by 27.8% year over year, primarily due to a 46.4% increase in F&M hotels’ RevPAR and the increase of 167 F&M hotels.

 

Total revenues from F&M restaurants were RMB17.4 million (US$2.4 million)^[1], a 4.8% year-over-year decrease. The decrease was mainly due to a decrease of 17 F&M stores numbers, and partially offset by a 22.9% increase in F&M stores’ average daily sales.

 

Total revenues from wholesale and others were RMB48.7 million (US$ 6.7 million)^[1], a 33.2% year-over-year decrease, mainly because of reduced business from supermarkets, partially offset by increased business through distributors.

 

 

Total operating costs and expenses

 

		Six Months Ended
		June 30, 2022				June 30, 2022				June 30, 2022				June 30, 2022
		RMB				RMB				RMB				RMB
		Hotel				Restaurant				Elimination				Total
Operating costs and expenses
Operating costs			307,750,028				234,911,742				289,605				542,951,375
Selling and marketing expenses			18,852,606				9,717,435								28,570,041
General and administrative expenses			99,724,402				21,847,196								121,571,598
Other operating expenses			2,048,734				2,240,920								4,289,654
Other general expenses			490,619,710												490,619,710
Total operating costs and expenses			918,995,480				268,717,293				289,605				1,188,002,378

 

		Six Months Ended
		June 30, 2023				June 30, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		RMB				RMB				RMB				RMB				US$
		Hotel				Restaurant				Elimination				Total				Total
Operating costs and expenses
Operating costs			284,364,378				204,308,159				(610,088	)			488,062,449				67,306,890
Selling and marketing expenses			24,838,605				9,385,645								34,224,250				4,719,740
General and administrative expenses			90,535,547				21,338,810								111,874,357				15,428,179
Other operating expenses			843,564				6,990,654								7,834,218				1,080,388
Other general expenses			15,973,584												15,973,584				2,202,858
Total operating costs and expenses			416,555,678				242,023,268				(610,088	)			657,968,858				90,738,055

 

 

Operating costs were RMB488.1 million (US$67.3 million)^[1], a 10.1% year-over-year decrease.

 

Operating costs of the hotel business were RMB284.4 million (US$39.2 million)^[1], a 7.6% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle Hotel Management Group (Australia) Pty Ltd., or Argyle, and the disposal of our interest in Urban Hotel Group, or Urban, and was partially offset by higher consumables and higher utility costs as business rebounded, as well as higher rents with lower exemption compared to last year.

 

Operating costs of the restaurant business were RMB204.3 million (US$28.2 million)^[1], a 13.0% year-over-year decrease. The decrease was due to the closure of 64 stores.

 

Selling and marketing expenses were RMB34.2 million (US$4.7 million)^[1], a 19.8% year-over-year increase.

 

Selling and marketing expenses of the hotel business were RMB24.8 million (US$3.4 million)^[1], a 31.8% year-over-year increase. The increase was mainly attributable to higher sales-channel commissions, higher sales staff salaries, and higher travel expenses.

 

Selling and marketing expenses of the restaurant business were RMB9.4 million (US$1.3 million)^[1], a 3.4% year-over-year decrease. The decrease was mainly attributable to lower advertising expenses and lower sales-channel commissions.

 

General and administrative, or G&A expenses were RMB111.9 million (US$15.4 million)^[1], an 8.0% year-over-year decrease.

 

G&A expenses of the hotel business were RMB90.5 million (US$12.5 million)^[1], a 9.2% year-over-year decrease. The decrease was mainly due to the deconsolidation of Argyle and the disposal of our interest in Urban,and partially offset by higher consulting fees and higher staff related expenses.

 

G&A expenses of the restaurant business were RMB21.3 million (US$2.9 million)^[1], a 2.3 % year-over-year decrease. The decrease was mainly due to lower staff related expenses and lower rents due to the closure of 64 stores.

 

Other general expenses of the hotel business were RMB16.0 million (US$2.2 million)^[1], a 96.7% year-over-year decrease.These expenses include the provisions for loan receivables related to franchisee loans, and impairments caused by the disposal of 4 unprofitable hotels.

 

Gross profit was RMB306.1 million (US$42.2 million)^[1], a year-over-year increase of 84.7%. Gross margin was 38.5%, compared to 23.4% a year ago. The gross profit of the hotel business was RMB278.8 million (US$38.5 million)^[1], an 86.4% year-over-year increase. The gross profit of the restaurant business was RMB27.8 million (US$3.8 million)^[1], a 67.5% year-over-year increase.

 

 

Income from operations was RMB150.9 million (US$20.8 million)^{[1] ,} compared to a loss from operations of RMB474.3 million in the first half of 2022, with a margin of 19.0%.

 

Income from operations of the hotel business was RMB160.4 million (US$22.1 million)^[1], compared to a loss from operations of RMB457.7 million in the first half of 2022, with a margin of 28.5%.

 

Loss from operations of the restaurant business was RMB9.0 million (US$1.2 million)^[1], compared to a loss from operations of RMB16.1 million in the first half of 2022, with a margin of -3.9%.

 

Net income was RMB177.3 million (US$24.5 million)^[1], compared to a net loss of RMB384.5 million in the first half of 2022, and net margin was 22.3%.

 

Net income of the hotel business was RMB191.8 million (US$26.5 million)^[1], compared to a net loss of RMB360.9 million in the first half of 2022, and net margin was 34.1%.

 

Net loss of the restaurant business was RMB14.1 million (US$1.9 million)^[1], compared to a net loss of RMB23.2 million in the first half of 2022, and net margin was -6.1%.

 

Adjusted EBITDA (non-GAAP)^[2] was RMB226.9 million (US$31.3 million)^[1], a year-over-year increase of 137.8%. Adjusted EBITDA margin, defined as adjusted EBITDA (non-GAAP) as a percentage of total revenues, was 28.6%, compared to 13.5% a year ago.

 

Core net income (non-GAAP) was RMB136.1 million (US$18.8 million)^[1], a year-over-year increase of 65.2%. The core net margin, defined as core net income (non-GAAP) as a percentage of total revenues, for the first half of 2023 was 17.1%, compared to 11.6% one year ago.

 

Earnings per American Depositary Share, or ADS, (basic and diluted) were RMB1.79 (US$0.25)^[1], up from RMB-3.38 one year ago. Core net income per ADS (basic and diluted) (non-GAAP) for the first half of 2023 was RMB1.33 (US$0.18)^[1], up from RMB0.80 a year ago.

 

Cash flow Operating cash inflow was RMB313.1 million (US$43.2 million)^[1] as a result of income from operations. Investing cash inflow for the first half of 2023 was RMB128.2 million (US$17.7 million)^[1], which was primarily attributable to proceeds from short-term investments and repayment from franchisees. The investing cash inflow was partially offset by purchases of property and equipment and short-term investments. Financing cash outflow was RMB37.4 million (US$5.2 million)^[1], mainly attributable to the repayment of bank loans by the end of the June 30, 2023.

 

 

Cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits. As of June 30, 2023, the Company had total cash and cash equivalents, restricted cash, short term investments, investments in equity securities and time deposits of RMB1,440.1 million (US$198.6 million)^[1], compared to RMB1,119.4 million as of December 31, 2022. The increase was primarily due to cash from operating activities and repayment from franchisees, proceeds from disposal of subsidiaries, partially offset by repayment of bank loans and investment of property.

 

Guidance

 

Taking into account the recovery in long-term trends and short-term industry fluctuations, we expect total revenues of organic hotels for the full year of 2023 to grow 30%-35% of the 2022 levels. Total revenues for our restaurant business and our organic hotel business, for the full year of 2023 are expected to grow 15%-20% over the 2022 levels.

 

The guidance set forth above reflects the Company's current and preliminary views based on its recovery and may not be indicative of the final financial results for any future periods or the full year.

 

Conference Call

 

GreenTree's management will hold an earnings conference call at 9:00 PM U.S. Eastern Time on September 18, 2023, (9:00 AM Beijing/Hong Kong Time on September 19, 2023).

 

Dial-in numbers for the live conference call are as follows:

 

International	1-412-902-4272
Mainland China	4001-201-203
US	1-888-346-8982
Hong Kong	800-905-945 or 852-3018-4992
Singapore	800-120-6157

 

Participants should ask to join the GreenTree call, please dial in approximately 10 minutes before the scheduled time of the call.

 

A telephone replay of the conference call will be available after the conclusion of the live conference call until September 25, 2023.

 

Dial-in numbers for the replay are as follows:

 

International Dial-in	1-412-317-0088
U.S. Toll Free	1-877-344-7529
Canada Toll Free	855-669-9658
Passcode:	8450773

 

Additionally, a live and archived webcast of this conference call will be available at http://ir.998.com.

 

 

Use of Non-GAAP Financial Measures

 

We believe that Adjusted EBITDA and core net income, as we present them, are useful financial metrics to assess our operating and financial performance before the impact of investing and financing transactions, income taxes and certain non-core and non-recurring items in our financial statements.

 

The presentation of Adjusted EBITDA and core net income should not be construed as an indication that our future results will be unaffected by other charges and gains we consider to be outside the ordinary course of our business.

 

The use of Adjusted EBITDA and core net income has certain limitations because it does not reflect all items of income and expenses that affect our operations. Items excluded from Adjusted EBITDA and core net income are significant components in understanding and assessing our operating and financial performance. Depreciation and amortization expense for various long-term assets, income tax and share-based compensation have been and will be incurred and are not reflected in the presentation of Adjusted EBITDA. Each of these items should also be considered in the overall evaluation of our results. Additionally, Adjusted EBITDA and core net income do not consider capital expenditures and other investing activities and should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, interest expense/income, gains/losses from investments in equity securities, income tax expenses, share-based compensation, share of loss in equity investees, government subsidies and other relevant items both in our reconciliations to the corresponding U.S. GAAP financial measures and in our consolidated financial statements, all of which should be considered when evaluating our performance.

 

The terms Adjusted EBITDA and core net income are not defined under U.S. GAAP, and Adjusted EBITDA and core net income are not measures of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing our operating and financial performance, you should not consider this data in isolation or as a substitute for our net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, our Adjusted EBITDA and core net income may not be comparable to Adjusted EBITDA and core net income or similarly titled measures utilized by other companies since such other companies may not calculate Adjusted EBITDA and core net income in the same manner as we do.

 

Reconciliations of the Company's non-GAAP financial measures, including Adjusted EBITDA and core net income, to the consolidated statement of operations information are included at the end of this press release.

 

 

About GreenTree Hospitality Group Ltd.

 

GreenTree Hospitality Group Ltd. ("GreenTree" or the "Company") (NYSE: GHG) is a leading hospitality and restaurant management group in China. As of June 30, 2023, GreenTree had a total number of 4,108 hotels and 218 restaurants. In 2023, HOTELS magazine ranked GreenTree 12th among the 225 largest global hotel groups in terms of number of hotels in its annual HOTELS' 225. GreenTree was the fourth largest hospitality company in China in 2022 according to the China Hospitality Association. In 2023, GreenTree completed its acquisition of Da Niang Dumplings and Bellagio, two leading restaurant chain businesses in China.

 

GreenTree has a broad portfolio of diverse brands spanning from the economy to mid-scale, up-scale and luxury segments of the hospitality industry mainly in China. Through its strong membership base, expansive booking network, superior system management with moderate charges, and fully supported by its operating departments including Decoration, Engineering, Purchasing, Operation, IT and Finance, GreenTree aims to keep closer relationships with all of its clients and partners by providing a diverse brand portfolio that features comfort, style and value.

 

For more information on GreenTree, please visit http://ir.998.com

 

Safe Harbor Statements

 

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. In some cases, these forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," "confident," "future," or other similar expressions. GreenTree may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about or based on GreenTree's current beliefs, expectations, assumptions, estimates and projections about us and our industry, are forward-looking statements that involve known and unknown factors, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Such factors and risks include, but not limited to the following: GreenTree's goals and growth strategies; its future business development, financial condition and results of operations; trends in the hospitality industry in China and globally; competition in our industry; fluctuations in general economic and business conditions in China and other regions where we operate; the regulatory environment in which we and our franchisees operate; and assumptions underlying or related to any of the foregoing. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made, in this press release are current as of the date of the press release. Except as required by law, GreenTree undertakes no obligation to update any such information or forward-looking statements to reflect events or circumstances after the date on which the information is provided or statements are made, or to reflect the occurrence of unanticipated events.

 

 

Financial Tables and Operational Data Follow

 

GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Balance Sheets

 

			December 31,				June 30,				June 30,
			2022				2023				2023
			RMB				RMB				US$
ASSETS
Current assets:
Cash and cash equivalents			701,332,213				1,115,384,452				153,818,550
Restricted cash			7,937,397				-				-
Short-term investments			186,031,572				235,416,298				32,465,392
Investments in equity securities			41,361,346				27,460,488				3,786,974
Accounts receivable, net of allowance			140,429,505				126,306,120				17,418,410
Amounts due from related parties			451,786,275				44,473,106				6,133,122
Prepaid rent			-				-				-
Inventories			30,503,712				23,052,986				3,179,152
Other current assets			142,169,713				147,472,648				20,337,408
Loans receivable, net			181,667,170				152,938,524				21,091,187
Total current assets			1,883,218,903				1,872,504,622				258,230,195
Non-current assets:
Amounts due from a related party			112,360,000				112,360,000				15,495,153
Restricted cash			25,359,592				23,544,862				3,246,985
Long-term time deposits			130,000,000				-				-
Loans receivable, net			177,172,509				98,598,159				13,597,308
Property and equipment, net			899,985,340				883,944,435				121,901,512
Intangible assets, net			174,748,932				171,687,271				23,676,757
Goodwill			128,752,950				128,752,950				17,755,844
Long-term investments			176,854,460				186,909,291				25,775,970
Operating lease right-of-use assets			1,676,544,520				1,633,368,783				225,251,856
Other assets			120,620,533				114,673,765				15,814,236
Deferred tax assets			242,186,616				260,348,940				35,903,761
TOTAL ASSETS			5,747,804,355				5,486,693,078				756,649,577

 

 

LIABILITIES AND EQUITY
Current liabilities:
Short-term bank loans			298,100,000				270,700,000				37,331,237
Long-term bank loans, current portion			-				-				-
Accounts payable			123,522,029				113,604,869				15,666,828
Advance from customers			26,480,779				22,822,957				3,147,430
Amounts due to related parties			24,810,304				23,130,913				3,189,899
Salary and welfare payable			89,343,058				95,815,922				13,213,620
Deferred rent			-				-				-
Deferred revenue			199,656,130				201,488,954				27,786,597
Accrued expenses and other current liabilities			455,519,530				505,932,951				69,771,345
Income tax payable			74,672,133				116,954,407				16,128,750
Dividends payable			-				-				-
Operating lease liabilities, current			271,518,556				280,717,711				38,712,743
Deferred tax liabilities			34,473,265				34,344,492				4,736,322
Total current liabilities			1,598,095,784				1,665,513,176				229,684,771
Long-term bank loans			160,000,000				150,000,000				20,685,946
Deferred rent			-				-				-
Deferred revenue			232,857,456				225,165,519				31,051,745
Other long-term liabilities			128,196,031				112,114,674				15,461,320
Operating lease liabilities, non-current			1,521,589,481				1,473,955,554				203,267,766
Deferred tax liabilities			63,815,023				50,773,630				7,002,004
Unrecognized tax benefits			350,002,241				381,962,640				52,675,057
TOTAL LIABILITIES			4,054,556,016				4,059,485,193				559,828,609
Shareholders’ equity:
Class A ordinary shares			222,587,070				222,587,070				30,696,161
Class B ordinary shares			115,534,210				115,534,210				15,932,896
Paid-in capital			94,000,801				94,000,801				12,963,303
Treasury Stock			(16,971,057	)			(16,971,057	)			(2,340,416	)
Additional paid-in capital			1,911,328,052				1,491,556,644				205,695,068
Retained earnings (Accumulated losses)			(698,677,163	)			(540,865,018	)			(74,588,697	)
Accumulated other comprehensive income			27,732,104				28,728,211				3,961,801
Total GreenTree Hospitality Group Ltd. shareholders’ equity			1,655,534,017				1,394,570,861				192,320,116
Non-controlling interests			37,714,322				32,637,024				4,500,852
Total shareholders’ equity			1,693,248,339				1,427,207,885				196,820,968
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			5,747,804,355				5,486,693,078				756,649,577

 

GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements of Comprehensive Income

 

		Six Months Ended				Three Months Ended								Six Months Ended
		June 30, 2022				March 31, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		RMB				RMB				RMB				RMB				US$
Revenues
Leased-and-operated revenues			342,051,529				170,890,916				209,887,906				380,778,822				52,511,801
Franchised-and-managed revenues			293,768,857				178,526,853				186,246,039				364,772,892				50,304,482
Wholesales and others			72,849,016				29,802,650				18,855,627				48,658,277				6,710,283
Total revenues			708,669,402				379,220,419				414,989,572				794,209,991				109,526,566
Operating costs and expenses
Operating costs			(542,951,375	)			(243,155,310	)			(244,907,139	)			(488,062,449	)			(67,306,890	)
Selling and marketing expenses			(28,570,041	)			(16,015,579	)			(18,208,671	)			(34,224,250	)			(4,719,740	)
General and administrative expenses			(121,571,598	)			(57,755,145	)			(54,119,212	)			(111,874,357	)			(15,428,179	)
Other operating expenses			(4,289,654	)			(1,492,483	)			(6,341,735	)			(7,834,218	)			(1,080,388	)
Other general expenses			(490,619,710	)			(11,664,345	)			(4,309,239	)			(15,973,584	)			(2,202,858	)
Total operating costs and expenses			(1,188,002,378	)			(330,082,862	)			(327,885,996	)			(657,968,858	)			(90,738,055	)
Other operating income			5,043,707				3,159,519				11,511,398				14,670,917				2,023,212
Income from operations			(474,289,269	)			52,297,076				98,614,974				150,912,050				20,811,723
Interest income and other, net			24,042,558				7,629,014				9,750,337				17,379,351				2,396,722
Interest expense			(17,441,575	)			(5,528,061	)			(3,868,469	)			(9,396,530	)			(1,295,841	)
Gains (losses) from investment in equity securities			21,687,584				(4,536,562	)			(263,836	)			(4,800,398	)			(662,005	)
Other income, net			14,751,769				(2,149,582	)			77,119,089				74,969,507				10,338,768
Income before income taxes			(431,248,933	)			47,711,885				181,352,095				229,063,980				31,589,367
Income tax expense			46,658,590				7,022,835				(57,972,918	)			(50,950,083	)			(7,026,338	)
Income (loss) before share of gains in equity investees			(384,590,343	)			54,734,720				123,379,177				178,113,897				24,563,029
Share of loss/(income) in equity investees, net of tax			75,125				(445,618	)			(341,265	)			(786,883	)			(108,516	)
Net income(loss)			(384,515,218	)			54,289,102				123,037,912				177,327,014				24,454,513
Net loss/(income) attributable to non-controlling interests			35,800,468				3,768,594				1,308,704				5,077,298				700,192
Net income attributable to ordinary shareholders			(348,714,750	)			58,057,696				124,346,616				182,404,312				25,154,705
Net earnings per share
Class A ordinary share-basic and diluted			(3.38	)			0.57				1.22				1.79				0.25
Class B ordinary share-basic and diluted			(3.38	)			0.57				1.22				1.79				0.25
Net earnings per ADS
Class A ordinary share-basic and diluted			(3.38	)			0.57				1.22				1.79				0.25
Class B ordinary share-basic and diluted			(3.38	)			0.57				1.22				1.79				0.25
Weighted average shares outstanding
Class A ordinary share-basic and diluted			68,286,954				67,416,046				67,416,046				67,416,046				67,416,046
Class B ordinary share-basic and diluted			34,762,909				34,762,909				34,762,909				34,762,909				34,762,909
Other comprehensive income, net of tax
Foreign currency translation adjustments			(9,730,001	)			810,574				185,533				996,107				137,370
Comprehensive income, net of tax			(394,245,219	)			55,099,676				123,223,445				178,323,121				24,591,883
Comprehensive loss/(income) attributable to non-controlling interests			35,800,468				3,768,594				(4,843,631	)			(1,075,037	)			(148,254	)
Comprehensive income (loss) attributable to ordinary shareholders			(358,444,751	)			58,868,270				118,379,814				177,248,084				24,443,629

 

GreenTree Hospitality Group Ltd.

 

Unaudited Hotel Business Results

 

		Six Months Ended				Three Months Ended								Six Months Ended
		June 30, 2022				March 31, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		RMB				RMB				RMB				RMB				US$
Revenues
Leased-and-operated revenues			171,272,365				82,073,240				131,490,687				213,563,927				29,451,812
Franchised-and-managed revenues			275,539,547				169,480,457				177,936,543				347,417,000				47,910,995
Others			10,564,787				1,036,848				1,188,732				2,225,580				306,921
Total revenues			457,376,699				252,590,545				310,615,962				563,206,507				77,669,728
Operating costs and expenses
Hotel operating costs			(307,750,028	)			(134,236,998	)			(150,127,380	)			(284,364,378	)			(39,215,641	)
Selling and marketing expenses			(18,852,606	)			(11,075,999	)			(13,762,606	)			(24,838,605	)			(3,425,400	)
General and administrative expenses			(99,724,402	)			(46,092,069	)			(44,443,478	)			(90,535,547	)			(12,485,423	)
Other operating expenses			(2,048,734	)			(151,220	)			(692,344	)			(843,564	)			(116,333	)
Other general expenses			(490,619,710	)			(11,664,345	)			(4,309,239	)			(15,973,584	)			(2,202,858	)
Total operating costs and expenses			(918,995,480	)			(203,220,631	)			(213,335,047	)			(416,555,678	)			(57,445,655	)
Other operating income			3,917,398				2,608,096				11,183,689				13,791,785				1,901,974
Income from operations			(457,701,383	)			51,978,010				108,464,604				160,442,614				22,126,047
Interest income and other, net			23,730,138				7,475,298				9,597,042				17,072,340				2,354,383
Interest expense			(15,178,612	)			(4,724,690	)			(3,167,262	)			(7,891,952	)			(1,088,350	)
Gains (losses) from investment in equity securities			21,687,584				(4,536,562	)			(263,836	)			(4,800,398	)			(662,005	)
Other income, net			14,664,617				(2,426,540	)			76,946,162				74,519,622				10,276,727
Income before income taxes			(412,797,656	)			47,765,516				191,576,710				239,342,226				33,006,802
Income tax expense			51,800,695				9,365,855				(56,097,180	)			(46,731,325	)			(6,444,544	)
Income (loss) before share of gains in equity investees			(360,996,961	)			57,131,371				135,479,530				192,610,901				26,562,258
Share of loss/(income) in equity investees, net of tax			75,125				(445,618	)			(341,265	)			(786,883	)			(108,516	)
Net income(loss)			(360,921,836	)			56,685,753				135,138,265				191,824,018				26,453,742

 

 

GreenTree Hospitality Group Ltd.

 

Unaudited Restaurant Business Results

 

		Six Months Ended				Three Months Ended								Six Months Ended
		June 30, 2022				March 31, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		RMB				RMB				RMB				RMB				US$
Revenues
Leased-and-operated revenues			171,008,920				89,376,893				78,963,181				168,340,074				23,215,158
Franchised-and-managed revenues			18,229,310				9,046,396				8,309,496				17,355,892				2,393,487
Wholesales and others			62,284,229				28,765,802				17,666,895				46,432,697				6,403,362
Total revenues			251,522,459				127,189,091				104,939,572				232,128,663				32,012,007
Operating costs and expenses
Restaurant operating costs			(234,911,742	)			(109,219,983	)			(95,088,176	)			(204,308,159	)			(28,175,384	)
Selling and marketing expenses			(9,717,435	)			(4,939,580	)			(4,446,065	)			(9,385,645	)			(1,294,340	)
General and administrative expenses			(21,847,196	)			(11,663,076	)			(9,675,734	)			(21,338,810	)			(2,942,756	)
Other operating expenses			(2,240,920	)			(1,341,263	)			(5,649,391	)			(6,990,654	)			(964,055	)
Other general expenses			-				-				-				-				-
Total operating costs and expenses			(268,717,293	)			(127,163,902	)			(114,859,366	)			(242,023,268	)			(33,376,535	)
Other operating income			1,126,309				551,423				327,709				879,132				121,238
Income from operations			(16,068,525	)			576,612				(9,592,085	)			(9,015,473	)			(1,243,290	)
Interest income and other, net			312,420				153,716				153,295				307,011				42,339
Interest expense			(2,262,963	)			(803,371	)			(701,207	)			(1,504,578	)			(207,491	)
Gains (losses) from investment in equity securities			-				-				-				-				-
Other income, net			87,152				276,958				172,926				449,884				62,041
Income before income taxes			(17,931,916	)			203,915				(9,967,071	)			(9,763,156	)			(1,346,401	)
Income tax expense			(5,271,945	)			(2,407,407	)			(1,940,124	)			(4,347,531	)			(599,552	)
Income (loss) before share of gains in equity investees			(23,203,862	)			(2,203,492	)			(11,907,194	)			(14,110,686	)			(1,945,953	)
Share of loss/(income) in equity investees, net of tax			-				-				-				-				-
Net income(loss)			(23,203,862	)			(2,203,492	)			(11,907,194	)			(14,110,686	)			(1,945,953	)

 

 

GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements

 

		Six Months Ended				Six Months Ended				Six Months Ended				Six Months Ended
		June 30, 2022				June 30, 2022				June 30, 2022				June 30, 2022
		Hotel				Restaurant				Elimination				Total
		RMB				RMB				RMB				RMB
Revenues
Leased-and-operated revenues			171,272,365				171,008,920				(229,756	)			342,051,529
Franchised-and-managed revenues			275,539,547				18,229,310								293,768,857
Wholesales and Others			10,564,787				62,284,229								72,849,016
Total revenues			457,376,699				251,522,459				(229,756	)			708,669,402
Operating costs and expenses
Operating costs			(307,750,028	)			(234,911,742	)			(289,605	)			(542,951,375	)
Selling and marketing expenses			(18,852,606	)			(9,717,435	)							(28,570,041	)
General and administrative expenses			(99,724,402	)			(21,847,196	)							(121,571,598	)
Other operating expenses			(2,048,734	)			(2,240,920	)							(4,289,654	)
Other general expenses			(490,619,710	)											(490,619,710	)
Total operating costs and expenses			(918,995,480	)			(268,717,293	)			(289,605	)			(1,188,002,378	)
Other operating income			3,917,398				1,126,309								5,043,707
Income from operations			(457,701,383	)			(16,068,525	)			(519,361	)			(474,289,269	)

 

 

GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements

 

		Six Months Ended				Six Months Ended				Six Months Ended				Six Months Ended
		June 30, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		Hotel				Restaurant				Elimination				Total
		RMB				RMB				RMB				RMB
Revenues
Leased-and-operated revenues			213,563,927				168,340,074				(1,125,179	)			380,778,822
Franchised-and-managed revenues			347,417,000				17,355,892								364,772,892
Wholesales and Others			2,225,579				46,432,698								48,658,277
Total revenues			563,206,506				232,128,664				(1,125,179	)			794,209,991
Operating costs and expenses
Operating costs			(284,364,378	)			(204,308,159	)			610,088				(488,062,449	)
Selling and marketing expenses			(24,838,605	)			(9,385,645	)							(34,224,250	)
General and administrative expenses			(90,535,547	)			(21,338,810	)							(111,874,357	)
Other operating expenses			(843,564	)			(6,990,654	)							(7,834,218	)
Other general expenses			(15,973,584	)											(15,973,584	)
Total operating costs and expenses			(416,555,678	)			(242,023,268	)			610,088				(657,968,858	)
Other operating income			13,791,785				879,132								14,670,917
Income from operations			160,442,613				(9,015,472	)			(515,091	)			150,912,050

 

 

GreenTree Hospitality Group Ltd.

 

Unaudited Condensed Consolidated Statements of Cash Flows

 

		Six Months Ended				Three Months Ended								Six Months Ended
		June 30, 2022				March 31, 2023				June 30, 2023				June 30, 2023				June 30, 2023
		RMB				RMB				RMB				RMB				US$
Operating activities:
Net (loss) income			-384,515,218				54,289,102				123,037,911				177,327,013				24,454,513
Depreciation and amortization			79,849,031				31,080,092				35,745,507				66,825,599				9,215,672
Impairment of long lived assets			56,212,849				2,900,000								2,900,000				399,928
Impairment of goodwill			91,236,480
Share of (gains) losses in equity method investments			-75,125				445,618				341,265				786,883				108,516
Non-cash lease expense			41,659,260				64,053,832				70,769,259				134,823,091				18,592,954
Loss from disposal of a subsidiary			13,944,925				1,223,952								1,223,952				168,791
Interest income			-262,334				-390,378				-1,267,532				-1,657,910				-228,636
Bad debt expense			340,846,428				12,359,278				6,320,196				18,679,474				2,576,017
Losses and impairment (Gains) on equity securities held			-21,687,584				4,536,562				263,836				4,800,398				662,005
(Gains) losses on disposal of property and equipment			3,050,035				-113,587				341,428				227,841				31,421
Foreign exchange (gains) losses			-12,024,153				987,543				-2,075,742				-1,088,199				-150,070
Share-based compensation			271,139				-11,636				40,228				28,592				3,943
Common control acquisition			519,360				257,546				257,546				515,092				71,034
Changes in operating assets and liabilities			-65,089,156				-6,084,179				-86,198,991				-92,283,170				-12,726,431
Net cash provided by operating activities			143,935,937				165,533,745				147,574,911				313,108,656				43,179,657
Investing activities:
Purchases of property and equipment			-30,771,557				-34,116,117				-37,617,117				-71,733,234				-9,892,465
Purchases of intangible assets			-60,215				-42,454				-309,827				-352,281				-48,582
Proceeds from disposal of property and equipment			2,288,823				6,973,574				7,723,107				14,696,681				2,026,765
Purchases of investments			-48,860,000								-51,370,000				-51,370,000				-7,084,247
Proceeds from investments			506,295,349				110,300,378				61,142,806				171,443,184				23,643,096
Loan advances			94,927,368				27,302,903				48,235,746				75,538,649				10,417,256
Loan collections			-200,868,160				-8,029,596				-1,945,000				-9,974,596				-1,375,560
Net cash (used in) provided by investing activities			322,951,608				102,388,688				25,859,715				128,248,403				17,686,263
Financing activities:
Distribution to the shareholders			-40,999,458
Loan from non- controlling interest			300,000
Repayment of short-term borrowings			-169,100,000				-136,600,000				-17,800,000				-154,400,000				-21,292,734
Proceeds from bank borrowings			25,300,000				117,000,000								117,000,000				16,135,038
Capital contribution from non-controlling interest holders			-1,600,000
Net cash provided by (used in) financing activities			-186,099,458				-19,600,000				-17,800,000				-37,400,000				-5,157,696
Effect of exchange rate changes on cash and cash equivalents			649,388				-40,524				383,575				343,051				47,309
Net (decrease) increase in cash and cash equivalents			281,437,475				248,281,909				156,018,201				404,300,110				55,755,533
Cash and cash equivalents at the beginning of the period			385,452,920				734,629,202								734,629,202				101,310,000
Cash and cash equivalents at the end of the period			666,890,395				982,911,111				156,018,201				1,138,929,312				157,065,533

 

 

GreenTree Hospitality Group Ltd.

 

Unaudited Reconciliation of GAAP and Non-GAAP Results

 

		Six Months Ended
		June 30, 2022				June 30, 2023				June 30, 2023
		RMB				RMB				US$
Net income			(384,515,218	)			177,327,013				24,454,513
Deduct:
Other operating income			5,043,707				14,670,917				2,023,212
Interest income and other, net			24,042,558				17,379,351				2,396,722
Gains from investment in equity securities			21,687,584				-				-
Share of gain in equity investees, net of tax			75,125				-				-
Other income, net			14,751,769				74,969,507				10,338,768
Add:
Other operating expenses			4,289,654				7,834,218				1,080,388
Other general expenses			490,619,710				15,973,584				2,202,858
Income tax expenses (benefits)			(46,658,590	)			50,950,083				7,026,338
Share of loss in equity investees, net of tax			-				786,883				108,516
Interest expenses			17,441,575				9,396,530				1,295,841
Depreciation and amortization			79,849,031				66,825,599				9,215,672
Losses from investment in equity securities			-				4,800,398				662,005
Adjusted EBITDA (Non-GAAP)			95,425,419				226,874,533				31,287,429

 

 

		Six Months Ended
		June 30, 2022				June 30, 2023				June 30, 2023
		RMB				RMB				US$
Net income			(384,515,218	)			177,327,013				24,454,513
Deduct:
Government subsidies (net of 25% tax)			1,251,065				6,671,305				920,015
Gains from investment in equity securities (net of 25% tax)			16,265,688				-				-
Other income (net of 25% tax)			11,063,827				56,227,130				7,754,076
Add:
Share-based compensation			271,139				28,592				3,943
Losses from investments in equity securities (net of 25% tax)			-				3,600,299				496,504
One-time fees and expenses			4,588,086				2,055,989				283,534
Other general expenses			490,619,710				15,973,584				2,202,858
Impairment charges and provisions for other assets			-				-				-
Core net income (Non-GAAP)			82,383,137				136,087,042				18,767,261
Core net income per ADS (Non-GAAP)
Class A ordinary share-basic and diluted			0.80				1.33				0.18
Class B ordinary share-basic and diluted			0.80				1.33				0.18

 

 

Hotel Operational Data 

 

		June 30, 2022				June 30, 2023
Total hotels in operation:			4,669				4,108
Leased and owned hotels			67				65
Franchised hotels			4,602				4,043
Total hotel rooms in operation			332,073				303,387
Leased and owned hotels			6,986				7,137
Franchised hotels			325,087				296,250
Number of cities			367				357

 

		Quarter Ended
		2022 Q1				2023 Q1
Occupancy rate (as a percentage)
Leased-and-owned hotels			52.6	%			62.9	%
Franchised hotels			60.2	%			71.9	%
Blended			60.0	%			71.7	%
Average daily rate (in RMB)
Leased-and-owned hotels			199				229
Franchised hotels			152				166
Blended			153				167
RevPAR (in RMB)
Leased-and-owned hotels			105				144
Franchised hotels			91				119
Blended			92				120

 

		Quarter Ended
		2022 Q2				2023 Q2
Occupancy rate (as a percentage)
Leased-and-owned hotels			57.1	%			74.6	%
Franchised hotels			62.3	%			77.9	%
Blended			62.2	%			77.8	%
Average daily rate (in RMB)
Leased-and-owned hotels			217				255
Franchised hotels			145				179
Blended			147				181
RevPAR (in RMB)
Leased-and-owned hotels			124				190
Franchised hotels			90				139
Blended			91				141

 

 

		Number of Hotels in Operation								Number of Hotel Rooms in Operation
		June 30, 2022				June 30, 2023				June 30, 2022				June 30, 2023
Mid-to-up-scale			528				438				47,347				42,338
GreenTree Eastern			201				217				22,402				23,205
Deepsleep Hotel			7				7				467				534
Gem			52				54				4,728				4,873
Gya			66				70				5,639				5,904
Vx			81				90				7,069				7,822
Urban Garden and others			121				-				7,042				-
Mid-scale			2,999				2,933				233,950				229,270
GreenTree Inn			2,183				2259				180,255				181,015
GT Alliance			521				545				37,545				39,091
GreenTree Apartment			19				21				1,260				1,351
Vatica			110				108				7,969				7,813
City 118 Selected and others			166				-				6,921				-
Economy hotels			1,142				737				50,776				31,779
Shell			648				737				28,030				31,779
City 118 and others			494				-				22,746				-
Total			4,669				4,108				332,073				303,387

 

Restaurant Operational Data

 

		June 30, 2022				June 30, 2023
Total restaurants in operation:			280				218
Leased and owned restaurants			146				104
Franchised restaurants			134				114
Number of cities			81				66
Da Niang Dumplings			245				182
Bellagio			35				36
Total restaurants in operation:			280				218

 

 

		Quarter Ended
		2022 Q1				2023 Q1
ADT
Leased-and-owned restaurants			170				143
Franchised restaurants			95				81
Blended			130				110
AC (in RMB)
Leased-and-owned restaurants			51				61
Franchised restaurants			39				46
Blended			46				55
ADS (in RMB)
Leased-and-owned restaurants			8,640				8,716
Franchised restaurants			3,712				3,745
Blended			6,027				6,080

 

		Quarter Ended
		2022 Q2				2023 Q2
ADT
Leased-and-owned restaurants			92				142
Franchised restaurants			56				86
Blended			78				120
AC (in RMB)
Leased-and-owned restaurants			60				61
Franchised restaurants			45				46
Blended			52				53
ADS (in RMB)
Leased-and-owned restaurants			5,505				8,657
Franchised restaurants			2,503				3,936
Blended			4,051				6,371

 

 

For more information, please contact:

 

GreenTree

 

Ms. Selina Yang

 

Phone: +86-158-2166-6251

 

E-mail: ir@998.com

 

Mr. Allen Wang

 

Phone: +86-181-0184-0639

 

E-mail: ir@998.com

 

Christensen

 

In Shanghai

 

Mr. Jerry Xu

 

Phone: +86-138-1680-0706

 

E-mail: jerry.xu@christensencomms.com

 

In Hong Kong 

 

Ms. Karen Hui 

 

Phone: +852-9266-4140 

 

E-mail: karen.hui@christensencomms.com

 

In the US 

 

Ms. Linda Bergkamp 

 

Phone: +1-480-614-3004

 

E-mail: linda.bergkamp@christensencomms.com

 

 

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